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Fed Stress Test Released: Citi, SunTrust, Ally And MetLife Have Insufficient Capital

Tyler Durden's picture




 

When we announced the news of Jamie Dimon's surprising announcement, we said that "Since we are now obviously replaying the entire credit crisis, from beginning to end, must as well go all in. Now - who's next? And perhaps just as importantly, who isn't." Who isn't it turns out are 4 banks that did not pass the Fed's stress test results. These are SunTrust, naturally Ally, MetLife and... Citi. Way to earn that 2011 $15 million comp Vic! To summarize: across the 19 banks taking the test, the maximum losses are projected to hit a total of $534 billion. But at least Jamie Dimon gets to pay his dividend. Also, the European LTRO stigma comes to the US in the form of banks who do dividend hike/buyback, vs those that do not.. and of course the 4 unlucky ones that fail the stress test entirely.

Banks at or below 5% are ooopsie.

From the Fed:

The results of the stress scenario projections suggest that the 19 BHCs as a group would experience significant losses under the assumptions of the Supervisory Stress Scenario. Losses at the 19 BHCs are projected to total $534 billion over the nine quarters of the scenario, including losses across the loan portfolios, trading and counterparty credit losses from the global financial market shock, and losses on securities held in the BHCs’ investment portfolios. Losses related to operational risk events such as fraud, computer systems failure, and employee lawsuits, and losses related to mortgage repurchases, which are included in pre-provision net revenue (PPNR), add another $115 billion to this total. Projected PPNR at the 19 BHCs is $294 billion over the nine quarters of the scenario. Together, the high projected losses and low projected PPNR result in projected net income before taxes of $222 billion for the 19 BHCs. This is an extremely low level of net income relative to historical experience in the U.S. banking industry, even in periods of considerable economic and financial market stress.

 

Despite sometimes significant projected decreases, most of the BHCs maintain stressed regulatory capital ratios including all planned capital distributions above regulatory minimum levels over the course of the stress scenario horizon.24 Overall, 4 of the 19 BHCs have one or more projected regulatory capital ratios (including capital distributions) that fall below regulatory minimum levels at some point over the stress scenario horizon, including 3 BHCs with a stressed ratio of tier 1 common ratio below the 5 percent benchmark established in the capital plans rule. In interpreting these results, it is important to recall that the Federal Reserve’s stress scenario projections are deliberately stringent and conservative assessments under hypothetical, adverse economic conditions and the results are not forecasts or the most likely outcomes for these BHCs.

 

The minimum levels for BHCs to be considered adequately capitalized are 4 percent for the tier 1 ratio, 8 percent for the total capital ratio, and 3 or 4 percent for the tier 1 leverage ratio. Based on the U.S. capital adequacy guidelines, the tier 1 leverage minimum is 3 percent for BHCs with a composite BOPEC rating of "1" and for BHCs that have implemented the Board’s risk-based capital measure for market risk. The tier 1 leverage minimum is 4 percent for all other BHCs. The tier 1 leverage ratio minimum is 4 percent for Ally Financial Inc., American Express Company, Capital One Financial Corporation, and MetLife, Inc., and 3 percent for the rest of the 19 BHCs participating in CCAR 2012. The capital plans rule further stipulates that the BHCs must demonstrate their ability to maintain tier 1 common ratios above 5 percent.

This is what the economic conditions were in the worst case:

So... Buy the dip?

Full report (pdf):

 

 

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Tue, 03/13/2012 - 16:42 | 2251796 HedgeAccordingly
HedgeAccordingly's picture

She loves stress tests- http://hedge.ly/gFWVSm

Tue, 03/13/2012 - 16:48 | 2251813 TruthInSunshine
TruthInSunshine's picture

LMFAO.

There will be a run on Citi, ala Lehman 2008, requiring hundreds of billions of more BernankBux recapitalization of that notorious black hole of capital, and Hank Paulson will come out of comfortable retirement and start making the rounds as a guest on CN(BS)C and Bloomturd warning of martial law & tanks in the street if the 2012 Taxpayer CORNHOLE-II Act isn't passed in the next  24 hours.

We'll find out that AIG has been dabbling in massive numbers of CDS contracts again, only this time on PIIGS sovereign debt.

Good times.

Tue, 03/13/2012 - 16:53 | 2251851 SheepDog-One
SheepDog-One's picture

Hundreds of billion more BernankBux? Mere chicken scratch at this point.

Tue, 03/13/2012 - 16:57 | 2251863 AbruptlyKawaii
AbruptlyKawaii's picture

yawn if 4 money center banks failed tier one and no one cared......

i wanna see steve leisman and maria bart explode on live tee vee and sorkin getting ass reamed for a bonus by becky quick with a dildo as buffect sucks his tiny lil dick and jim cramer does backflips

Tue, 03/13/2012 - 16:57 | 2251871 overbet
overbet's picture

and the spy is going up up up lol

Tue, 03/13/2012 - 17:03 | 2251898 kito
kito's picture

phew...thanks to the stress test results, the "uncertainty" has been taken out of the markets..............................you may now commence with new dow highs.......................

Tue, 03/13/2012 - 17:06 | 2251912 Comay Mierda
Comay Mierda's picture

cramer just jizzed on his keyboard

Q2 is gonna be EPIC.... in a bearish way.

http://stockcharts.com/h-sc/ui?s=$SPX:$VIX&p=W&b=5&g=0&id=p97370419357

Tue, 03/13/2012 - 17:14 | 2251933 Jake88
Jake88's picture

party on!

Tue, 03/13/2012 - 17:18 | 2251952 Troll Magnet
Troll Magnet's picture

SunTrust should be okay.  I just wired a few thousand bucks to Gainesville Coins via SunTrust.  They can now fractional reserve the fuck out of that and create kazillion dollars I'm sure.

Tue, 03/13/2012 - 17:48 | 2252022 JLee2027
JLee2027's picture

Get out while you still can I always say.

Tue, 03/13/2012 - 18:30 | 2252101 The Big Ching-aso
The Big Ching-aso's picture

 

 

Shit, am I confused or what.   I thought Bennie said a while back in front of Congress that revealing which banks got Fed loans would unfairly jeopardize their financial positions - you know could cause them bank runs.     Now all of a sudden we got Feddy stress checks that throw these suckers under the same sort of Greydog Special.

Am I just making a mountain out of a herpes sore?  

*Wait, I just thought of something.   You don't think Jamie came out early with the all BofA clear siren 'cause he's "banking" on lets say a Citi getting handed over to him for nuthin' do ya?    I mean, help me out here. 

 

Tue, 03/13/2012 - 18:53 | 2252166 TruthInSunshine
TruthInSunshine's picture

How sad is it when BAC & C can't even beat the goal-seeked, uber lower threshold "stress tests" that The Bernank designed for them, in consultation with them (i.e. under their directives)?

These stress tests are the health care equivalent of having an obese, artery-clogged person walk on a treadmill at a moderate pace for 1.913 seconds.

Tue, 03/13/2012 - 19:33 | 2252251 LetThemEatRand
LetThemEatRand's picture

And yet... "Citigroup rose 6.3 per cent before the market close, but fell 4 per cent after hours as it became clear the bank had failed."  Goes up 6.3 percent on [false] hopes it passed, then drops only 4 percent on proof it failed the 1.913 second test.   In other words, it went up net on bad news. That's the market in a nutshell.

Tue, 03/13/2012 - 20:19 | 2252428 flacon
flacon's picture

Oh thank God my jpm bank is well capitalized. I'm up 7% today. Woo hoo,,, /sarcasm

Wed, 03/14/2012 - 04:46 | 2253231 jeff montanye
jeff montanye's picture

yes.  metlife is in big trouble at 5.1 but jpm is golden at 5.4 because this stress test is like particle physics: heisenberg is the only uncertainty.

Tue, 03/13/2012 - 19:38 | 2252283 nmewn
nmewn's picture

"How sad is it when BAC & C can't even beat the goal-seeked, uber lower threshold "stress tests" that The Bernank designed for them, in consultation with them (i.e. under their directives)?"

Snatched my thoughts right out of my head.

What a farce.

Wed, 03/14/2012 - 06:33 | 2253273 neidermeyer
neidermeyer's picture

SunTrust is TOAST ,, whatever they show on their books as assetts is trash ,, they wrote mortgages all through the boom using MERS standard language naming MERS as the owner of the loans ... they didn't offload most of their loans ,, held many of them ... and they're all uncollectible.

Tue, 03/13/2012 - 17:07 | 2251915 SheepDog-One
SheepDog-One's picture

I guess Pavlov's dogs are so conditioned now that no matter what the news, they just drool all over the place. 

I pray one day soon all these people are somehow brought down in spectacular fashion. The Dutch shaved the heads of the women sellouts, shot the sellout men. To good for any of these traitors.

Tue, 03/13/2012 - 17:18 | 2251958 Id fight Gandhi
Id fight Gandhi's picture

That's quite the image there. Maybe I'd tune in. Maybe.

Tue, 03/13/2012 - 17:14 | 2251936 LawsofPhysics
LawsofPhysics's picture

Yep.  The "devils we all know" are picking the winners and losers again.  Place your bets.

Tue, 03/13/2012 - 17:37 | 2252004 Chupacabra-322
Chupacabra-322's picture

@ LawsofPhysics, my bet is I'm going long on Ammo. 

Tue, 03/13/2012 - 17:19 | 2251960 YC2
YC2's picture

Yeah if one of those four goes down, all the other stress tests are moot because it looks like they didnt stress test counterparty risk in those scenarios.  I dont have time to read now but it seems like "If all hell breaks loose and magically everyone else gets through, we will get through to due to said magic."

Tue, 03/13/2012 - 16:47 | 2251818 centerline
centerline's picture

Looks expensive.  I have insufficient capital for that.  Maybe I should talk to the Fed about a loan.

Tue, 03/13/2012 - 17:01 | 2251885 Divided States ...
Divided States of America's picture

No well in hell the stock market craps 50% and the banks are fine. We just had a 2% down day a few days ago (which feels like eons ago actually) and we already chatting up the next QE..

Tue, 03/13/2012 - 17:06 | 2251908 Conrad Murray
Conrad Murray's picture

Banks on QE as represented with a Blazing Saddles clip - http://www.youtube.com/watch?v=Z_JOGmXpe5I

Tue, 03/13/2012 - 16:53 | 2251853 johngaltfla
johngaltfla's picture

Translation:

Snoopy Sucks.

Ally needs more taxpayer dollars.

Citi wasted all their taxpayer dollars.

STI is a GS acquisition target.

Media circus is now over.

Please return to your mind numbed ignorance of reality and buy more AAPL.

Tue, 03/13/2012 - 17:03 | 2251899 FlyoverCountryS...
FlyoverCountrySchmuck's picture

"Ally needs more taxpayer dollars."

Ally has been Sub-prime loaning to 450 credit score CREDIT CRIMINALS for months, on new GM Cars to boost Obama's sagging economic output numbers for the election.

WHODATHUNK it might be 'Stressful' to the banks bottom line?

 

But then again, what's a few hundred billion more taxpayer bucks, compared to THE GLORY OF A REELECTED OBAMA?

Tue, 03/13/2012 - 17:05 | 2251905 johngaltfla
johngaltfla's picture

Psstttt....we already OWN most of ALLY. Just sayin'....

Tue, 03/13/2012 - 16:55 | 2251864 LongSoupLine
LongSoupLine's picture

Bank of Countrywide Merrill Lynch passed?!?!  Fucking total hot stinking dogshit!

Tue, 03/13/2012 - 19:10 | 2252203 williambanzai7
williambanzai7's picture

THE HELPING HAND

Tue, 03/13/2012 - 20:08 | 2252395 LongSoupLine
LongSoupLine's picture

Fantastic William...as usual.

Tue, 03/13/2012 - 17:56 | 2252045 Silver Bug
Silver Bug's picture

Yet Gold plummets!? How does this nonsense make any sense. Unless it is complete and blatant manipulation. I think we all know that it is.

 

http://goldisking.blogspot.com/

Tue, 03/13/2012 - 19:47 | 2252314 donsluck
donsluck's picture

Perhaps manipulation, perhaps not. The Euro is sinking fast and money is going into the "safe haven" of $. Should see that coming! Stay in cash until gold turns around, then buy PMs.

Tue, 03/13/2012 - 16:42 | 2251797 Seasmoke
Seasmoke's picture

hey Vikram, why they always picking on the Indians

Tue, 03/13/2012 - 16:43 | 2251798 Ruffcut
Ruffcut's picture

Fail? That can't be. All are insolvent in a real world, but we are not in that space.

Tue, 03/13/2012 - 16:49 | 2251832 rsnoble
rsnoble's picture

No, you and I are in that space. The banks are in an alternate universe.

Tue, 03/13/2012 - 16:43 | 2251800 SHEEPFUKKER
SHEEPFUKKER's picture

Ponzi man do what ponzi can. 

Tue, 03/13/2012 - 16:43 | 2251802 ZippyBananaPants
ZippyBananaPants's picture

This is the only place to get actual news.  

All the idiots on CNBC and Bloomberg are falling all over themselves trying to make the best of this.  Maybe they can just get together and blow each other.

Tue, 03/13/2012 - 16:56 | 2251868 Schmuck Raker
Schmuck Raker's picture

OFF CAMERA!

"...they can just get together and blow each other[, OFF CAMERA]."

Whoa, that was close. Be careful Zippy.

Tue, 03/13/2012 - 16:44 | 2251804 AbruptlyKawaii
AbruptlyKawaii's picture

5 yrs of this shit non-stop.......

Tue, 03/13/2012 - 16:55 | 2251861 cat2
cat2's picture

...and "stress test" is just another codeword for "gimme a bailout!"

Tue, 03/13/2012 - 17:10 | 2251921 kito
kito's picture

funny i dont remember stress test results during the boom years........you would think, since the recession is behind us, and we are in a period of growth (organic of course), and consumers are spending again, and jobs are as plentiful as lollipops (poisoned) at bank teller windows, shirley there should be no reason to publicize large bank stress tests...........

Tue, 03/13/2012 - 17:22 | 2251972 YC2
YC2's picture

LOL good point

Tue, 03/13/2012 - 18:13 | 2252079 krispkritter
krispkritter's picture

...and stop calling me Surely!

Tue, 03/13/2012 - 20:18 | 2252421 bluebare
bluebare's picture

Don't get surly, Shirley.

Tue, 03/13/2012 - 17:13 | 2251932 surf0766
surf0766's picture

It's the new communism,, enjoy it.

Tue, 03/13/2012 - 17:37 | 2251993 cat2
cat2's picture

True.  After the first round of bailouts I remember CEOs having to return bonus money and such.  No longer, it's the new normal.  In fact, shouldn't the shareholders be up in arms if they DON'T see some failing of stress tests?  There is not enough "profit" taking if you don't fail your stress test!  That's leaving taxpayer money on the table!

In fact, can I sign up my small business for a Fed Stress Test (tm)?  I think I may fail.

Wed, 03/14/2012 - 00:18 | 2253008 TrulyBelieving
TrulyBelieving's picture

Yup, maybe 5 more of this and bankers are going to start getting a bad reputation.

Tue, 03/13/2012 - 16:44 | 2251805 blu
blu's picture

This should be bullish, as these four will be getting fat bailouts before the weekend that they will apply to purchases of stocks.

Ramp it, beotchez!

Tue, 03/13/2012 - 17:44 | 2252015 overbet
overbet's picture

If C is green tomorrow Im quitting.

Tue, 03/13/2012 - 17:53 | 2252039 AbruptlyKawaii
AbruptlyKawaii's picture

 itll close green triple digit gain $540 billion is piss

Tue, 03/13/2012 - 16:45 | 2251806 centerline
centerline's picture

Is that a whisper of future bail-outs in the air?

Tue, 03/13/2012 - 16:46 | 2251810 A Man without Q...
A Man without Qualities's picture

Bank of America is ok?  Riiight....

Tue, 03/13/2012 - 16:48 | 2251826 Sudden Debt
Sudden Debt's picture

In the land of idiots, they are the least idiotic

Tue, 03/13/2012 - 16:49 | 2251829 Dr. Engali
Dr. Engali's picture

Of course Bank of America is okay. they have to take care of our favorite old kleptocrate, and watch uncle Warren's back.

Tue, 03/13/2012 - 16:51 | 2251839 centerline
centerline's picture

Very well capitalized it seems. Plus, you have to remember they are adequately hedged through appropriate financial vehicles written by other well capitalized banks who are also hedged in a similar manner. No worries at all.

/sarc

Tue, 03/13/2012 - 17:10 | 2251924 FlyoverCountryS...
FlyoverCountrySchmuck's picture

SURE THEY ARE! They have paid the proper amount of protection money... err... 'Donations' to Obama and the Democrat Party!

You'll note how GOLDMAN scored the same as SunTrust, but somehow passes the "Extra Stress" part of the exam?

Tue, 03/13/2012 - 16:46 | 2251811 JailBank
JailBank's picture

I'm fucking sick of it.

Tue, 03/13/2012 - 16:47 | 2251815 ss123
ss123's picture

Upon further inspection, many are in the 5s, meaning, many just squeeked by, like JPM.

If I'm reading this right.

Tue, 03/13/2012 - 18:09 | 2252073 Id fight Gandhi
Id fight Gandhi's picture

Shhh. You're not supposed to read the details!

Tue, 03/13/2012 - 19:13 | 2252210 francis_sawyer
francis_sawyer's picture

The underwater basket weaving course I took at the University of Phoenix for my Masters I elected to take PASS/FAIL...

Tue, 03/13/2012 - 16:47 | 2251816 Boilermaker
Boilermaker's picture

SURPRISE!!!!

Tue, 03/13/2012 - 16:47 | 2251817 Sudden Debt
Sudden Debt's picture

Can't citi just flip their credit card debt into loans?
Numbers would so much different and they could still repackage it and sell it to other morons.

Tue, 03/13/2012 - 16:47 | 2251820 alien-IQ
alien-IQ's picture

WFC just increased their dividend also. Who's next? GS?

Tue, 03/13/2012 - 16:52 | 2251848 Boilermaker
Boilermaker's picture

ALL OF THEM BABY!!!!  ALL OF THEM!!!

It's a fucking awesome!

Tue, 03/13/2012 - 16:58 | 2251873 Rainman
Rainman's picture

Only 13 trading days til quarter's end and Booyah Bonuses....

Tue, 03/13/2012 - 19:01 | 2252183 HelluvaEngineer
HelluvaEngineer's picture

Wow.  It's almost like someone suggested that they all increase their dividend.  Whom might that be?

Tue, 03/13/2012 - 16:48 | 2251821 Artful Dodger
Artful Dodger's picture

In other news, Apple failed the "if iPads become inedible" stress test. However, at this time there is no reason to mark iPads to edibility.

Tue, 03/13/2012 - 16:48 | 2251825 Boilermaker
Boilermaker's picture

CNBC literally spraying jizz all over the cameras now.

Dude, take a step back and look at this fucking flea circus.  What a fucking laughable joke.

Tue, 03/13/2012 - 16:52 | 2251849 GeneMarchbanks
GeneMarchbanks's picture

Sovereign Default = Bullish.

Soak it in...

Tue, 03/13/2012 - 16:54 | 2251857 SheepDog-One
SheepDog-One's picture

The day that the US Dollar defaults will probably result in at least +500 on the DOW.

Tue, 03/13/2012 - 16:58 | 2251876 SheepDog-One
SheepDog-One's picture

I cant believe you actually watch CNBC...why enable that bullshit outfit?

Tue, 03/13/2012 - 17:22 | 2251971 Jake88
Jake88's picture

CNBC can cause brain damage.

Tue, 03/13/2012 - 17:18 | 2251957 kito
kito's picture

keep watching cnbc and you will need a stress test...........

Tue, 03/13/2012 - 16:48 | 2251828 monopoly
monopoly's picture

Not too many places around to get the truth. At least here you have the facts. Does not mean the road ahead will not have twists and turns to throw us off but at least you can make a rational decision based on Fact. And if you decide to chase AAPL, NFLX, C, or AMZN after reading Zero Hedge, well that is fine, at least you are making the decision knowing what is real.

Tue, 03/13/2012 - 16:49 | 2251830 barliman
barliman's picture

 

Tyler

Would any of your resources have any information on whether there was an unusual jump in purchases of financial equities prior to Jamie Dimon's FTF announcement?

barliman

Tue, 03/13/2012 - 16:49 | 2251833 Dick Darlington
Dick Darlington's picture

Shiti didn't pass??!!! Shocked! Shocked I am!

Tue, 03/13/2012 - 20:28 | 2252458 UP Forester
UP Forester's picture

After all the fluffers on the boobs-tube were pumping up the Big C, saying it'll go semi-parabolic?

Pump and dump is the name of the game, they're just not going to be satisfied until all the "money on the sidelines" has entered, been desegregated, hyper-rehypothecated, subordinated and vaporized....

Tue, 03/13/2012 - 16:51 | 2251836 e-man
e-man's picture

At least Credit-Anstalt passed the stress test.  Now everything will be fine.

Tue, 03/13/2012 - 16:51 | 2251840 SheepDog-One
SheepDog-One's picture

Oh! They dont have sufficiant capital? Well then get busy and print some up for them!

Tue, 03/13/2012 - 17:20 | 2251965 kito
kito's picture

why bother to print some up? the promise is always there..............

Tue, 03/13/2012 - 16:53 | 2251841 Tsar Pointless
Tsar Pointless's picture

I see BNYMellon is in the 13s.

So it passed with flying colors.

LOLOF'nL!

Tue, 03/13/2012 - 16:52 | 2251845 chump666
chump666's picture

go jamie fuck up your competition so we can adjust our battered short pos after JPM crazy meltup.

i love it when wall street starts to feed off it's self.  cue rating agency bank downgrades and...volatilty.  jmp used the market/fed to strengthen it's position.  what a world we live in.

 

Tue, 03/13/2012 - 16:52 | 2251850 Seasmoke
Seasmoke's picture

looks like proof that GM Bank is the worst in the country by far

Tue, 03/13/2012 - 16:56 | 2251852 Artful Dodger
Artful Dodger's picture

For some reason I remember sitting at a computer on a summerish day in 2008, with SPY at 128. This was before "anything" had "happened" [edit: well, sort of]. Now, SPY is at 140 and that's with financial underperformance weighing it down significantly. Clearly corporations are better off now, because, umm... er... they've bought government? They are cannibalizing everything including themselves for the bottom line? Because Apple and/or central banks will LBO the entire market if necessary? Hmm...

Tue, 03/13/2012 - 17:04 | 2251904 ghostfaceinvestah
ghostfaceinvestah's picture

What was the national deficit run rate vs today?  What was the size of the Fed balance sheet?  Therein lies your answer.

Tue, 03/13/2012 - 16:53 | 2251854 Money 4 Nothing
Money 4 Nothing's picture

OT. Recycled Stooges: http://www.politico.com/news/stories/0312/73946.html

And no.. It's not "All Good" I found this out the hard way today.

Tue, 03/13/2012 - 16:54 | 2251855 Conman
Conman's picture

Buy the rumor, buy the news, buy buy buy.

Tue, 03/13/2012 - 16:55 | 2251860 Seize Mars
Seize Mars's picture

Met Life is a bank? Since when?

Tue, 03/13/2012 - 17:10 | 2251923 Agent P
Agent P's picture

Since the year 2000 Anno Domini

Tue, 03/13/2012 - 18:08 | 2252068 optimator
optimator's picture

GE suddenly became a bank around 2008.  That was just before they received TARP, and around that time Jeffy became a manager of the NY FED.

Tue, 03/13/2012 - 16:55 | 2251862 you enjoy myself
you enjoy myself's picture

this is with UE at 13% (which means 20%+ in reality), housing another 21% down, and equities off 50%?!!  you've got to be kidding.  do their models include every bank getting a free trillion from the Fed? 

Tue, 03/13/2012 - 16:57 | 2251870 SheepDog-One
SheepDog-One's picture

Theyre testing for 6,500 on the DOW? Gee, I wonder why THAT is!

Tue, 03/13/2012 - 18:09 | 2252072 Broccoli
Broccoli's picture

Yes, the assumption is no counter party risk and no money center bank failures. Thus, in the real thing the Fed is signalling they will cover all counter party risk and bank obligations. I mean we all knew it was going to anyway but this is just more confirmation.

Taxpayers weep, savers weep. Moral hazard, no such thing.

Tue, 03/13/2012 - 19:24 | 2252237 unununium
unununium's picture

Pity the Fed.  These melt-ups on bad news are such clear attempts to prove their power over markets.

They hope that next time, they ALL they will have to do is jawbone, and not intervene.  With 0% rates and QE on everyone's lips, that does not seem to have worked in quite some time.

Tue, 03/13/2012 - 16:56 | 2251866 SheepDog-One
SheepDog-One's picture

Feels like maybe todays manic market meltup at the last minute was for padding? I wouldnt be surprised by some sudden bad news for a few days. At this point way more money on the downside for these criminal bankers.

Tue, 03/13/2012 - 16:58 | 2251869 SDRII
SDRII's picture

only fitting met fails as they are selling the business to GE capital.

 

http://online.wsj.com/article/SB1000142405297020347910457712432260723992...

Tue, 03/13/2012 - 16:58 | 2251874 razorthin
razorthin's picture

Market screams higher AO.  Unfukkingbelievable.

Tue, 03/13/2012 - 17:02 | 2251893 SheepDog-One
SheepDog-One's picture

Yep, looks like only 2 or 3 more trading days until all equity markets blow past their all-time previous full retard highs.

Tue, 03/13/2012 - 17:23 | 2251974 Id fight Gandhi
Id fight Gandhi's picture

Never go full retard. Never!

Tue, 03/13/2012 - 16:58 | 2251875 adr
adr's picture

I wonder how much "capital" BofA absorbed from the Fed right before the stress test to eke out this WIN.

Based on this I should follow the advice of those commercials and open an Ally account, HAHAHAH.

I can't wait for a year from now when all the non-performing channel stuffed car loans come in.

Tue, 03/13/2012 - 16:58 | 2251877 Scalaris
Scalaris's picture

Don't think that this will dent Pandit's $53 mill payday, no?

Tue, 03/13/2012 - 17:00 | 2251881 Comay Mierda
Comay Mierda's picture

looks like bernank is putting citi on sale, maybe JPM can buy cheapo and continue doing god's work. didnt dexia pass stress tests? fuck it, gonna buy more aapl

Tue, 03/13/2012 - 17:00 | 2251883 corndog
corndog's picture

well hell, let's just get them some more capital!  where's my 'easy' button?

Tue, 03/13/2012 - 17:01 | 2251887 corndog
corndog's picture

Don't I hear Nero playing?

Tue, 03/13/2012 - 17:01 | 2251888 Racer
Racer's picture

Aren't they ALL under capitalised if they don't have $1 asset for $1 liability backing?

Tue, 03/13/2012 - 17:24 | 2251978 Id fight Gandhi
Id fight Gandhi's picture

Fractional banking system

Tue, 03/13/2012 - 17:01 | 2251889 SheepDog-One
SheepDog-One's picture

Why are they 'testing' those shitty economic factors, if theyre not expecting them? 50% collapse in stocks, 20% further R/E decline, and 20% unemployment? 

Tue, 03/13/2012 - 17:06 | 2251909 crawl
crawl's picture

Those are expectations for next year after obama's win in november.

Tue, 03/13/2012 - 17:21 | 2251922 SheepDog-One
SheepDog-One's picture

Makes no sense at all. Why do all this, to make ObaMao look good, only to then fail? That would only make sense to me if theyre planning to hand over the puppet presidency reigns to some white republican, then everybody could rage with anger at him while ObaMao sits in 'perfectly awesome best-ever president' status. 

Nah, makes no sense to make ObaMao look good, then have him fall on his sword at all.

Tue, 03/13/2012 - 17:07 | 2251916 Rainman
Rainman's picture

eggsacly...there will be more than 4 dead bank bodies if any of that shit goes down...for sure !

Tue, 03/13/2012 - 17:02 | 2251892 razorthin
razorthin's picture

"Capitalize" on PMs right here.

Tue, 03/13/2012 - 17:03 | 2251896 Yen Cross
Yen Cross's picture

 Those " Met Life" commercials have really payed off. I hear the Afflack Duck is for hire.

Tue, 03/13/2012 - 17:03 | 2251900 crawl
crawl's picture

Why don't these under capitalized banks just buy some aapl?

Tue, 03/13/2012 - 17:03 | 2251902 Global Hunter
Global Hunter's picture

citi and ally aren't very big or important besides its priced in!

Tue, 03/13/2012 - 17:05 | 2251907 Yen Cross
Yen Cross's picture

 How is Warren dealing with " Geico's" , NET JETS?   Those pesky ( crude futures)?

Tue, 03/13/2012 - 17:06 | 2251911 thetruthseeker
thetruthseeker's picture

We can take down the bankers in a period of weeks if we want to.  It is pretty easy.  Stop using the big 6 banks.  Tell all your friends and family to stop using them.  Tell everybody you encounter on the street to stop using them.  If only 20% of the population who banks with these guys changes their accounts, Dimon and these other crooks would be shitting their pants in a matter of weeks.  The most powerful vote we have is not at the polling booth but in our pocketbook.

Tue, 03/13/2012 - 17:14 | 2251934 SheepDog-One
SheepDog-One's picture

Well I was saying to do all that back in '08, everyone told me thats all ridiculous and the FED and ObaMao's got this shit and will fix it.

Tue, 03/13/2012 - 17:14 | 2251937 lizzy36
lizzy36's picture

My dear these banks only care about the upper 10% of the population.

And those people ain't going to stop banking with the big six.

The best you can hope for is an online social media campaign about some bullshit checking fee.

Quit worrying about the BIG BANKS.

Start figuring out how you are going to get EQUITY in your life. 

Tue, 03/13/2012 - 18:38 | 2252125 MachoMan
MachoMan's picture

I guess you're forgetting the bank runs of 2008...  before the FDIC made its announcement that it would increase the level of its guaranteed accounts...  this was in response to a giant sucking sound from all small and regional banks into the too big to fail banks, once the latter had been designated as too big to fail.  The same premise exists and it is exactly why the same have done nothing but try and INCREASE their systemic risk.  Sadly, the same thing is going to happen...  funds go up the chain of command, right into the hands of nationalization.  Good game if you can get it.  [hint: they're trying to do this except more drawn out over time...  too bad the time it will take to complete the task is longer than reality will grant].

Tue, 03/13/2012 - 17:06 | 2251913 lizzy36
lizzy36's picture

Ally Financial is majority owned by US government.

Ally Financial also made a massive push into SUBPRIME AUTO LOANS this time last year.

From Reuters May 31, 2011

http://www.reuters.com/article/2011/05/31/us-allyfinancial-idUSTRE74U4FY20110531

The company is making more loans to subprime borrowers, and financing more
purchases of used cars, both steps with higher risk. It has said it wants to
raise the percentage of auto loans on used cars that it makes to 50 percent from
its current 20 percent.


Subprime car lending is "a very attractive business today," Ally President
William Muir told analysts on May 3. Profit margins on the loans more than cover
the cost of expected losses from borrowers who fail to repay, he said. Plus,
providing loans on used cars endears the company to dealers.

From the most recent Ally Financial conference call:

Ally Financial Inc., which provides financing to General Motors Co. and Chrysler
Group LLC dealers and customers, has seen "crazy, irrational competition" in the
"super prime end of the marketplace," which is one reason why more banks are
targeting the lower end of the market, said Michael Carpenter, chief executive
of the Detroit-based lender, during an earnings conference call this month.

While the average credit score for borrowers receiving new and used loans
fell six points and nine points, respectively, payment performance improved
during the quarter, Experian said. 

Yes, THIS TIME IS DIFFERENT.

Tue, 03/13/2012 - 17:12 | 2251931 Yen Cross
Yen Cross's picture

 The fact that you are quoting " Reuters" , on Z/H is some what suspect.   Zero Hedge is light years ahead of ( LIBERAL RTfeeds).

      However, your arguement is worth merritt.

Tue, 03/13/2012 - 17:28 | 2251987 Agent P
Agent P's picture

There's good money to be made when it comes to usury and poor people.  Try running some analysis on a pay day loan business, or a rent to own furniture/appliance store, or a buy here / pay here used car lot.  Scum of the earth...of course they all claim to be helping the underprivileged obtain the finer things our society has to offer, when in fact they're ass raping them dry...like I said, good money / scum of the earth.

 

Tue, 03/13/2012 - 18:41 | 2252132 MachoMan
MachoMan's picture

The FED has created a shark tank...  I'm not sure what job prospects are out there that don't play on wage arbitrage, collecting interest on unwitting persons, sucking the government tit, or other methods of fraud or subterfuge, but I'd sure like to hear them.

Tue, 03/13/2012 - 22:54 | 2252863 Sunshine n Lollipops
Sunshine n Lollipops's picture

(crickets)

Tue, 03/13/2012 - 18:36 | 2252122 Withdrawn Sanction
Withdrawn Sanction's picture

Ally Financial also made a massive push into SUBPRIME AUTO LOANS this time last year.

Bought a used truck off a guy who related the story of his buddy who also tried to buy a used truck (much like the one I'd bought)...a 10+year old beater w/some useful life still in her.  He couldn't qualify for a loan for the beater (about $4K) even though he was putting 20% down and a 3 year note was easily supported on his income.  But the collateral I guess was "suspect."

Curiously, he did qualify for a 72 month low-rate loan from Ally on a new Chevy Silverado, list $36K.  He managed to make 5 or 6 payments and then not too longer after, the repo man came calling. Lost his credit, lost his truck, and his self-respect for being such a dope.  Could have probably saved the 5 or 6 pmts and been most of the way toward the beater.  But man, shiny chrome sure do look purdy.

Tue, 03/13/2012 - 17:06 | 2251914 Thomas Jefferson
Thomas Jefferson's picture

23 trillion in bailouts and 5 years and we still are talking about zombie banks.  This is 2008 all over again.

Tue, 03/13/2012 - 17:12 | 2251926 SheepDog-One
SheepDog-One's picture

$23 trillion at least, probably double that under the table.

And yea, we're talking about zombie banks again, however now thats 'good news'.

LOL, someone stop this stupid ride I want off.

Tue, 03/13/2012 - 17:26 | 2251981 Id fight Gandhi
Id fight Gandhi's picture

Haven't heard shadow banking mentioned in a while

Tue, 03/13/2012 - 17:08 | 2251918 optimator
optimator's picture

I'm impressed at all the planning that's gone into this scheme, and especially impressed today.

"Scheme, I meant no scheme, I merely posed a little, academic accounting theory."
Tue, 03/13/2012 - 17:09 | 2251920 DavidC
DavidC's picture

Those GDP projections look almost as good as Greece's.

Oh, and in terms of capital requirements, does the Fed practice as it preaches (hmm, leverage at over 53 to 1, doesn't feel like it)?

DavidC

Tue, 03/13/2012 - 17:11 | 2251927 Voltaire
Voltaire's picture

S&P at 1800 here we come!

Tue, 03/13/2012 - 17:14 | 2251939 SheepDog-One
SheepDog-One's picture

Well, everyone can have fun betting on that, I'm not.

Tue, 03/13/2012 - 17:14 | 2251938 IMA5U
IMA5U's picture

Q: So when will the public begin to care about how much $$$ the government has lost on Ally?

 

A: They never will. 

 

Another victory for The Central Planners known as The Obamanation and The Bernak

Tue, 03/13/2012 - 17:15 | 2251943 SheepDog-One
SheepDog-One's picture

No one will care until one morning everyone is looking at that DOW 6,500 the FED is stress testing the banks for. And I'll be laughing, bet on that.

Tue, 03/13/2012 - 17:15 | 2251941 earleflorida
earleflorida's picture

Basel's opium dens just went limit-down,... bastards!

Tue, 03/13/2012 - 17:20 | 2251949 sitenine
sitenine's picture

The worst case assumptions are far more telling then the test itself.  I couldn't care less what the Fed says the banks can withstand - they are likely lying anyway.  Even the worst case predicts GDP back up to 4% by 2014 (I'm assuming forever at that point), with an unemployment rate of around 11%, and housing just bouncing off the bottom?  Growth forever baby - and they don't even have to explain how!  The inevitability of the exponential function to trend towards infinity does not apply to economics apparently.

Tue, 03/13/2012 - 17:24 | 2251977 SheepDog-One
SheepDog-One's picture

Its the stress test parameters Im looking at, thats the real story. GDP is just bullshit, the 20% further R/E decline and equities 50% down is the tell here, thats where its all going soon.

Tue, 03/13/2012 - 19:57 | 2252352 Council of Econ...
Council of Economic Terrorists's picture

My guess is those conditions are what the Fed expects when they hike rates sometime after 2014.

Tue, 03/13/2012 - 17:18 | 2251954 jmcadg
jmcadg's picture

Dimon you arrogant fuck. Citi at 4.9, JPM at 5.4. Who gives a shit. It's only because you WILL be bailed out by the FED that it makes any difference.

I've still got a red hot poker ready to ram up your arse as soon as I finally meet you. You Prick.

Tue, 03/13/2012 - 17:20 | 2251966 Dermasolarapate...
Dermasolarapaterraphatrima's picture

I can't believe Citi "has insufficient funds"...WTF ...I just read some financial MSM this morning before I left  that said "don't be surprised if Citi comes out smelling like a rose"....

WTF?!

Tue, 03/13/2012 - 17:22 | 2251970 jmcadg
jmcadg's picture

Unfortunately the stench of horse shit growing the rose is somewhat overwhelming.

Tue, 03/13/2012 - 17:24 | 2251976 alfred b.
alfred b.'s picture

 

    Dressed for the stress.....rigged with fake numbers and sponsored by yr friendly neighborhood federal reserve!.....really....what's next, the fed  going around the country promoting their do-gooder message to the 8th to 12th graders....lollllll

 

Tue, 03/13/2012 - 17:27 | 2251982 icanhasbailout
icanhasbailout's picture

You know their shit must be bad when you realize that BAC must have passed the test

Tue, 03/13/2012 - 17:27 | 2251983 Lady Heather...UNCLE
Lady Heather...UNCLE's picture

market close end of Dec: 1258 This quarter it is up 11%!. Against a global backdrop that has hardly been rosey, 11% up! Wow, just wow

Tue, 03/13/2012 - 17:27 | 2251984 rlouis
rlouis's picture

rememberr the Dexia

Tue, 03/13/2012 - 17:31 | 2251991 Olympia
Olympia's picture

Imperialism and loansharking are perfectly identified ...identified, exactly as imperialism used to be identified with war conflicts. This is why we believe that the consequences of some “mistakes” easily reveal the “motives” of those who planned them.

In reality, there is a permanent “recycling” of the same tactics that lead to the mistake and then to disaster. The method used in the case of Greece is a version of the practice that started from the imperialistic centers to expand all over the world. Simply, in Greece, that is a “terminal”, banking illegal superprofits were produced so that loan sharks “spoil” the Greek public assets, while at the “center” of the planning banking superprofits were created so that loan sharks “spoil” the "Greeces”. Exactly the same illegal things were planned to bring profit to their loan sharking inspirators ...illegal profits.

More info about Global Debt Crisis here:

http://eamb-ydrohoos.blogspot.com/2012/01/global-debt-crisis.html

.

Tue, 03/13/2012 - 17:35 | 2251998 Pancho Villa
Pancho Villa's picture

Executive bonuses have first claim on financial company assets, followed by large, politically connected creditors, followed by smaller creditors.

And last, but also least, come depositors and clients.

Tue, 03/13/2012 - 17:36 | 2252000 bugs_
bugs_'s picture

sti needs a new owner

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